OPINION | The Council President's Possible Conflict of Interest

Sara Nelson sold a brewery to a hospitality giant while introducing a bill to undercut delivery drivers. Is this not a conflict of interest?

by Carl Nelson

On April 17, The Seattle Times reported that Seattle Hospitality Group (SHG) was acquiring a controlling stake in Fremont Brewing for an undisclosed sum, in effect buying the brewery from its owners — sitting Seattle City Council President Sara Nelson and her husband, corporate lawyer Matt Lincecum. The deal is presumably a favorable one for Nelson and Lincecum, as they will retain some ownership of the brewery as it joins Pike Brewing and Ethan Stowell Restaurants in SHG's portfolio.

This acquisition raises serious questions about conflicts of interest for the business-friendly council president. As she rapidly moves to change laws that affect the restaurant industry, Nelson's obligations as a policymaker are at odds with her role as a business owner. At the very least, she should recuse herself from introducing and voting on this legislation.

In 2022, the Seattle City Council (including Nelson) passed PayUp, new legislation aimed at providing a minimum wage for app-based delivery drivers and labor protections governing how companies like DoorDash, Instacart, and Uber Eats treat drivers, who are legally independent contractors, not employees. Delivery apps have seen an explosion of use since the pandemic started, and the drivers were among the essential workers credited with saving the restaurant industry at a time when nobody was dining out. The PayUp legislation established minimum pay for drivers per order, made price calculations transparent to drivers, and established recourse for drivers who had grievances with the app companies.

It's not surprising that the app companies did not like this policy. They retaliated by adding a $5 delivery fee to orders, while also lobbying elected officials to have the PayUp law overturned. It would seem like these efforts have found a sympathetic ear from Nelson, as she introduced a bill last week to do just that. In addition to reducing the amount that delivery companies are required to reimburse drivers for mileage, Nelson's bill also shields the app companies from Office of Labor Standards (OLS) investigations, which is a substantial gift, considering DoorDash had to pay a $1.6 million settlement last year with OLS as part of an alleged violation of worker protections.

Seattle Hospitality Group is a separate entity from Uber Eats or DoorDash, but SHG's portfolio contains at least nine restaurants that use app-based DoorDash. It's likely those restaurants have been affected by the delivery app companies' choice to tank their own business with the additional delivery fees. While it's unclear if the delivery app companies will actually remove the $5 delivery fee, it seems like the restaurants would stand to gain from increased demand for delivery, especially if it is paid for completely by the drivers.

It's also worth noting that SHG President and CEO Howard Wright has expressed admiration for Nelson's politics in the past. When endorsing Nelson's council campaign in 2021, Wright wrote on his website, "[Nelson] understands the challenges of running a business in a 'business unfriendly' city." It's fair to question whether SHG, which, according to The Seattle Times, has spent more than $16,000 on political causes since 2019, included an implicitly friendlier business climate in its appraisal of Fremont Brewing's value.

Whether there are any actual legal conflicts from the Fremont Brewing deal remains to be seen. The Seattle Times reports the Seattle Ethics and Elections Commission (SEEC) only learned about the acquisition after it was in motion, and they haven't had a chance to review the deal. It is unclear if they will be able to release their findings before the PayUp repeal passes.

Regardless of legality, we should think about what Nelson's new bill actually amounts to — a generous gift to the app companies and the restaurants who use them paid for by the delivery drivers. With SHG, which purchased Nelson's brewery, standing to gain from the bill, it seems inappropriate for Nelson to be introducing and voting on this legislation. She should, at the very least, abstain before the SEEC can assess conflicts of interest.

A private business owner is free to sell a brewery and negotiate the best possible terms of that sale. But most private business owners are not in a position to directly affect public policy in a way that can be favorable to their potential buyers. A city council president is a public servant who has to answer to the public — including the delivery app drivers who stand to have their wages in favor of the restaurant industry. It seems in this case that Sarah Nelson has two conflicting interests, and Seattleites deserve to know which one they are dealing with.

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Carl Nelson is a freelance illustrator and animator living in Seattle, Washington. You can see his work at www.carlfnelson.com

📸 Featured Image: Sara Nelson at The Great Debate at Rainier Arts Center in October 2021. (Photo: Alex Garland)